In today’s employment environment, it is not uncommon for a long-time employee to be approached by his or her employer with a severance agreement, with little or no warning. Often employees are caught off guard when they’re told they are being terminated and then asked to sign severance agreement. Here are three common questions that often come up in this situation:
1. Do I have a right to severance pay if my employer fires me?
Unless you have a written contract or enforceable severance policy with your employer, in Kentucky, as an at-will employee, you are not legally entitled to severance pay. While you don’t have a right to severance pay, you do have a right to receive your final paycheck. Your employer cannot condition receipt of your final paycheck on a requirement that you sign a severance agreement.
However, if you feel you have been targeted for termination based upon your gender, religion, race/national origin, age, or disability, because you complained about discrimination, or in retaliation for making a complaint against your employer, you could be the victim of a wrongful termination.
2. Do I have to sign a release before I can receive any severance pay?
While most employers will ask, or more likely require, that you sign a release before you receive any severance payments, there is no legal requirement that you sign a release. Many employers use severance payments as a way to control and limit their future liability when terminating an employee. The only way an employer can limit its liability for wrongful termination or discrimination is to obtain a release of your legal claims.
Be aware that if you do sign a release in order to get your severance pay, you are most likely giving up your right to pursue any legal action against your employer. This includes the right to bring a suit against your employer for wrongful termination.
3. My employer told me I have to sign the severance agreement immediately.
In some cases, employees who are subject to a lay-off or a reduction-force are protected by the Older Workers Benefit Protection Act. The OWBPA requires that some employees be given a certain amount of time to review a severance agreement and, in some situations, you may even have seven days in which to revoke a severance agreement that you have already signed.